Spirit Airlines Files for Bankruptcy
Spirit Airlines announced today that it has filed for bankruptcy protection. The company says that the restructuring is expected to reduce its debt, provide increased financial flexibility, position Spirit for long-term success and accelerate investments.
Spirit is the largest low-cost airline in the United States but has seen losses more than $2.5 billion since the start of the Covid-19 pandemic in early 2020.
Spirit was set to merge with JetBlue, but the deal was blocked by a federal judge in January after the Department of Justice and several state attorneys general sued to stop it. The airline has been shrinking its operations since then and selling some of its planes in an effort to cut costs and raise cash.
The company says that it has received commitments for a $350 million equity investment from existing bondholders and will convert $795 million of their debt into stock in the restructured company. Bondholders will also extend a $300 million loan that, combined with Spirit’s remaining cash, will help the airline get through the restructuring.
Spirit expects to continue operating its business in the normal course throughout this prearranged, streamlined chapter 11 process. Guests can continue to book and fly without interruption and can use all tickets, credits and loyalty points as normal.
Spirit also published an open letter to customers, saying that they “expect to complete this process in the first quarter of 2025 and emerge even better positioned to deliver the best value in the sky.”
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